Economic inequality in pre-industrial societies: causes and effects

Recent interest in inequality has focused on its real or perceived effects on economic growth and social development, in contrast to past debates which concentrated more on the injustice of income inequality. Both scholars and policy makers are now asking how democratic and inclusive societies can function effectively with high inequality; the OECD has voiced concerns about the negative effects on economic growth, while the UN is worried about the effect of inequality on societal vulnerability. These negative effects may materialize directly in terms of people’s participation in the economy, human capital formation, or productive investments, or indirectly, through the growing leverage of the wealthy, the erosion of societal cohesion and resilience, or even outbursts of conflict and unrest.